James Greenwood, president of the Washington, D.C.-based Biotechnology Industry Organization, said that Arizona and other states that limit such research methods may not realize the benefits from President Barack Obama's move earlier this month to reverse a ban on federal funding of the controversial research.
"That seems to be a no-brainer," Greenwood said Friday of allowing research of stem cells that are harvested from embryos discarded by fertility clinics. "They are going to be destroyed one way or another."
Arizona's restrictions on embryonic stem-cell research come from two laws passed by the state Legislature. One prevents scientists from conducting research on cells collected from an aborted fetus. Another state law prohibits any public or government research institute from using federal, state or private money on "human cloning," which is defined in a way that blocks the scientific process involved with embryonic stem-cell research, according to the Arizona Attorney General's Office.
Arizona's ban does not apply to other types of stem-cell research, including projects involving adult stem cells or stem cells harvested from a newborn's cord blood. In fact, several Arizona scientists have pursued stem-cell research projects not involving embryonic stem cells.
Arizona's biotech interests largely have not pushed for a change in law to allow embryonic stem-cell research. Some believe the technology may make the ethical issue surrounding such research moot as new methods are developed.
"My hope and expectation is the science will allow research beyond the use of embryonic stem cells, and it will get the same results," said Bob Eaton, president and chief executive officer of the Arizona Bioindustry Association.
Overall, the biotech industry faces more pressing challenges, said Greenwood, who was in Phoenix last week to meet with biotechnology interests. Many companies are fighting for survival because of the recession and investors' aversion to the high-risk, high-reward industry.
A BIO survey released in January showed 30 percent of publicly traded biotech companies reported less than six months of cash on hand, and nearly half all public bio companies had less than a year's worth of cash.
Biotech companies that found a friendly market as recently as two years ago also are noticing the change. Just one of 20 companies that planned an initial public offering last year followed through with the stock offering. Phoenix-based Insys Therapeutics was among the companies that delayed an IPO because of the unfavorable market conditions.
Greenwood, a former U.S. representative from Pennsylvania for 12 years before being named BIO's top executive in January 2005, said his organization is pushing several congressional initiatives to aid the ailing industry.
BIO favors patent legislation that would protect a company's intellectual property for a period of up to 14 years. It can take a biotech firm a decade or longer to develop and market a new drug. Legislation now in Congress would cut down patents to as few as three years, giving biotechnology companies and their investors little incentive to pursue costly research and development, Greenwood said.
The industry group also favors health-care reform that provides universal access, incorporates market-based approaches and promotes innovation, including new drugs and tests.
If lawmakers adopt a plan that hastens the approval and use of generic drugs, it would result in substantial savings for consumers. But Greenwood said it would effectively eliminate the biotechnology industry's incentive to invest in research and development of new drugs, diagnostics and medical devices. Such a move would ultimately gut economic development, resulting in fewer high-paying jobs and less innovation. "We lead the world in this industry," Greenwood said.
But he said significant challenges, including health care and patent reform, threaten to undermine bio firms.
"Investors need to feel comfortable with making large investments," Greenwood said.
